China

Looming Chinese refinery cuts to hit oil demand

22 Jun 2017   China

 Some of China’s top oil refineries are having to take the highly unusual step of cutting operations during what is typically the peak demand summer season when hot weather drives up power usage and families take to the road during school holidays. Almost 10 percent of China’s refining capacity is set to be shut down during the third quarter, signaling that demand growth from the world’s top crude importer is stuttering further. West African and European suppliers are already feeling the chill from China’s reduced demand, and a global glut has dragged spot prices for crude this week to their lowest since November, 2016. Major Chinese oil refineries, including PetroChina’s Jinzhou will set their run rates around 6,500 […]

China Issues Second Batch Of Oil Import Quotas For 2017

20 Jun 2017   China

China has allowed a second batch of crude oil import quotas for independent refiners and some state-held companies for 2017, setting full-year quotas at a total of 91.73 million tons, or 1.83 million bpd, according to a document by China’s Ministry of Commerce obtained by Reuters . In January this year, China issued the first batch of quotas for non-state refiners, which totaled 68.81 million tons , refining sources told Reuters back then. As many as 29 companies, including independent refiners—the so-called teapots—and trading firms, were granted quotas, the refining sources noted, quoting an official document by the Chinese authorities. Late last year, China’s Ministry of Commerce had said that the quota for non-state refiners would be kept at 87.6 million tons, or 1.75 million bpd this year, flat compared to 2016. Now the second batch of the 2017 import quotas is set at 22.92 million tons, and included […]

GAC Motor targeting 1M unit sales by 2020, 20% new energy vehicles; entering US market by 2019; transition to electric “may be quite long”

20 Jun 2017   China, Electric Cars

GAC Motor was one of the few automakers, and the only Chinese auto brand, to take the main stage at last week’s Michelin Movin’On 2017 global sustainable mobility summit in Montreal. During his talk, Yu Jun, president of GAC Motor, said that his rapidly growing company is targeting sales of 1 million units annually by 2020, with 20% of those being new energy vehicles. Yu said that GAC plans to introduce seven new energy vehicle models—including both electric and hybrid plug-in designs—to the market this year. GAC has already established its first North America R&D Center in Silicon Valley, and plans to to enter the US market no later than 2019. As the fastest growing Chinese automaker, GAC Motor has achieved 85% compound annual growth rate for six consecutive years. In the first five months of 2017, GAC Motor has already blown past previous records with 207,000 cars sold, […]

Tesla Said Close to Agreeing on Plan for China Production

20 Jun 2017   China, Electric Cars

Local plant would allow automaker to bypass 25% import tariff Tesla’s China revenue tripled to more than $1 billion in 2016 Tesla Inc. is close to an agreement to produce vehicles in China for the first time, giving the electric-car maker better access to the world’s largest auto market, according to people familiar with the matter. The agreement with the city of Shanghai would allow Tesla to build facilities in its Lingang development zone and could come as soon as this week, said the people, who asked not to be identified because the negotiations are private. Details are being finalized and the timing of the announcement could change. Tesla would need to set up a joint venture with at least one local partner under existing rules and it isn’t immediately clear who that would be. Representatives for Tesla at the company’s headquarters in Palo Alto, California, didn’t immediately respond […]

Is China Inflating Its EV Sales?

16 Jun 2017   China

While China is being applauded as the world’s leading market for battery electric and plug-in hybrid vehicle sales, automakers are becoming frustrated over how to actually carry out a profitable long-term strategy for that market. A new draft proposal , posted this week on the website of the Legislative Affairs Office for China’s cabinet, mandates automakers to sell a high level of plug-in electrified vehicles (called “new energy vehicles” in China). That would equate to each automaker building credits equivalent to 8 percent of sales by 2018, 10 percent by 2019, and 12 percent by 2020. Sales figures report that more than 28 million new vehicles were sold in China last year. About 351,000 were new energy vehicles, making for only 1.25 percent of the total. Holding onto these high-level clashes with a compromise between Chinese Premier Li Keqiang and German Chancellor Angela Merkel made earlier this month. China […]

China’s Crude Oil Output Lowest Since 2011

15 Jun 2017   China

According to the statistics figures, as reported by Reuters , China’s crude output level was 3.83 million bpd in May, down by 3.7 percent year on year, to the lowest domestic production volume since the statistics office started publishing records in 2011. “ Declining output this year comes as China’s major oil fields Daqing and Shengli announced production cuts at the beginning of the year. The pace of decline in production will ease this year due to higher crude prices ,” Gao Jian, a crude oil analyst with China Sublime Information Group, told Reuters. Late last year, PetroChina said that it planned to cut capital spending at China’s largest oilfield Daqing by 20 percent in 2017. Last month, China’s refinery runs jumped by 5.4 percent on the year to 10.98 million bpd, and although they were down from a record level from March this year, throughput marked the highest […]

Chinese oil imports up more than 10 percent

9 Jun 2017   China

Crude oil deliveries to China on the rise and means the second-largest economy in the world is the top crude oil importer. Photo by Pepj/Shutterstock June 8 (UPI) — Customs data published Thursday from the Chinese government revealed the country is the largest importer of crude oil in the world. The General Administration of Customs reported that both imports and exports increased in China in May. Chinese exports were up 15.5 percent year-on-year, while imports into the second-largest economy in the world were up 22.1 percent, an increase from the gain of 18.6 percent in April. For the first five months of the year, data show Chinese crude oil imports were up 13.1 percent year-on-year, making China the world’s largest oil importer. The data, published Thursday by China’s official Xinhua News Agency, followed a report from Dutch commodity trader Trafigura that oil and petroleum product sales were up 25 […]

China’s Crude Demand Soars As Maintenance Season Comes To An End

9 Jun 2017   China

Thanks to a 13 percent surge in crude imports (as refiners prepare for maintenance season), China’s trade surplus hit its highest since Jan (though -4 percent YoY). Imports (+14.8 percent YoY) and Exports (+8.7 percent YoY) both beat expectations. China’s overseas shipments accelerated in May from a year earlier, as Bloomberg suggests global demand shows signs of picking up. (Click to enlarge) Exports rose 8.7 percent in May in dollar terms, the customs administration said Thursday. Imports increased 14.8 percent, leaving a trade surplus of $40.81 billion dollars. (In yuan terms, exports rose 15.5 percent and imports surged 22.1 percent, bringing the trade balance to 281.6 billion yuan.) A brighter international outlook may provide support to the world’s largest trading nation, with the World Trade Organization saying it expects trade to “expand moderately” in the second quarter. Still, after a robust start to the year, the domestic economy is […]

China’s coal imports in May rise 17% on year to 22.19 million mt

9 Jun 2017   China

China imported 22.19 million mt of coal — including lignite, thermal and metallurgical coal — in May, down 10.45% from the 24.78 million mt imported in April but up 16.61% from the 19.03 million mt in May last year, according to preliminary figures released Thursday by the General Administration of Customs. Imports over January-May rose 29.6% year on year to 111.68 million mt. “The rising total coal imports momentum [was] sustained in May, though weakened 10.5% on a month-on-month basis,” Citi analysts said in a note. “Strong year-on-year imports were thanks to continued restocking demand at mines, ports and mills and positive coking coal import arbitrages since April.” China exported 1.31 million mt of coal in May, up 84.51% year on year, the GAC data showed. Article continues below… Platts Coal Trader International is the only daily publication where you can access Platts proprietary price assessments for coal trading […]

Canada’s Oil Sands Open Up To Chinese Investment

9 Jun 2017   China, Tar Sands

Canada is inviting Chinese companies to invest in its oil sands, Canada’s Natural Resources Minister Jim Carr said on Thursday, after an exodus in the past few months saw international oil majors selling a total of US$23 billion worth of assets to domestic producers. Speaking at a conference call to reporters during his trip to China, Carr said “We think there are opportunities and we laid out, along with experts from industry, what we believe to be opportunities for them,” as quoted by Reuters. “We would welcome investment from any nation that’s interested in the oil sands,” the minister noted, without giving details of what kind of Chinese investment Canada would see as welcome. The government is interested in discussing proposals case by case, he said. Chinese firms, including PetroChina, CNOOC, and Sinopec had invested in Canada’s oil sands industry between 2005 and 2012. But now, with the price […]

China ‘teapot’ oil group urges compliance on quotas, tax

6 Jun 2017   China

An alliance of more than 20 of China’s independent oil refineries has urged its members to strictly adhere to government rules on oil quotas and taxes, according to a group statement seen by Reuters on Tuesday. The mostly privately run refineries, known as “teapots”, have upended China’s oil market after Beijing began allowing them to import crude in late 2015 in an effort to shake up a market dominated by state-owned majors. However, state firms like Sinopec and PetroChina have repeatedly accused the independents of undercutting their larger rivals by evading or under-paying consumption taxes for gasoline and diesel. Beijing in 2016 dispatched inspection teams to oversee the teapots’ tax records. The independents are also facing shifting government policies on oil quotas at a time when domestic oil demand […]

China will continue with climate pact even if US pulls out

1 Jun 2017   China, Climate

China said Thursday that it will work with the European Union to uphold the international agreement on climate change even if the U.S. pulls out. President Donald Trump is expected to announce his decision on whether to abandon the Paris climate accord Thursday afternoon U.S. time (3 p.m. EDT; 1900 GMT). While not mentioning the U.S. by name, Chinese Foreign Ministry spokeswoman Hua Chunying told reporters that climate change is a “global challenge” that no country can ignore. “No matter whether other countries’ positions may change, we will continue to uphold” a model of sustainable development, Hua said at a regularly scheduled news conference. China is the top emitter of man-made carbon dioxide emissions, and the United States is second. Both were key to reaching an agreement at Paris in 2015, which came into force in November and aims to keep global warming below 2 degrees […]

Not OPEC, China Dictates The Oil Prices

29 May 2017   China, Prices

The OPEC deal will lead to an ongoing tightening of the crude oil market, putting a floor beneath crude prices in the $50s per barrel in the second half of 2017, according to Helima Croft of RBC Capital Markets. She said that prices should ultimately “grind higher into the $60s” by the fourth quarter, with an average price for WTI expected at $61. Political and economic pressure surrounding Saudi Aramco’s IPO and Russian elections – both of which are slated for 2018 – will ensure that OPEC and non-OPEC does “whatever it takes” to keep oil prices stable and on the rise. But there are a lot of factors outside of OPEC’s control. High up on that list is the role of China, a country that has received little attention in the oil world as of late amid all the furor over the OPEC vs. U.S. shale debate. But […]

Is China Liberalizing Its Oil And Gas Industry At The Right Time?

29 May 2017   China

Foreign oil companies will soon be able to invest in China’s upstream sector through joint ventures with the country’s three major fossil fuel companies, according to a new manifesto by the Central Committee of the ruling Communist Party. The guidelines lay the groundwork for the liberalization of the Asian country’s energy production game, similar to the initiative spearheaded by Mexican President Enrique Nieto in 2014, which opened the nation’s fossil fuel industry to the world for the first time in nearly eight decades. Unfortunately for Mexico, just weeks after the country became open for business with foreign companies, oil prices crashed for the first time. Investment in oil exploration and extraction shrunk drastically as the industry’s biggest players published multibillion sales of owned assets. New funding for oil and gas has been hard to come by since the fall. Last year, global investment in upstream activities fell 23 percent […]

Analysis: China’s gasoil exports to rebound as Beijing hands out new quotas

29 May 2017   China

China’s gasoil exports fell sharply in April from the previous month’s record high, as a cocktail of lower stocks and reduced output at home prompted refiners to keep more barrels for local use, but market participants expect outflows to rebound in May on the back of new quotas. China’s April gasoil exports fell 35.7% month on month to 1.23 million mt, easing from a record high of 1.91 million mt in March, according to General Administration of Customs data released Wednesday. “Exports have returned to a more normal level — a level we normally see when domestic output goes down,” said an analyst in Beijing. Article continues below… 33rd Annual Asia Pacific Petroleum Conference (APPEC 2017) September 25 to 27, 2017 | Raffles City Convention Centre, Singapore As the most prestigious event in the Asia Pacific oil and gas industry calendar, APPEC 2017 delivers three days of market-driven discussions […]

Exclusive: IEA to review oil demand outlook after China, India signal auto policy shifts

The International Energy Agency will review its electric vehicle (EV) use and oil demand forecasts after India and China recently signaled new policies in favor of electric cars and vehicles using other alternatives to gasoline. In its current policies scenario, last updated in November 2016, the IEA expects vehicle demand for oil to rise until 2040. But after the world’s two fastest growing oil markets, China and India, indicated they are likely to take radical turns away from gasoline, the IEA says it will need to review its forecasts. “We will therefore revisit our analysis of future EV market penetration on the basis of these new announcements for the next World Energy Outlook 2017, to be released on 14 November,” an IEA spokesman told Reuters. In […]

China to toughen efforts in cutting excess capacity

11 May 2017   China

China will carry on phasing out sub-standard production capacity, especially in fields of steel and iron, coal-mining and coal-fired power plants, to keep up with targets set for the year. The decision was made at a State Council executive meeting, which was presided over by Premier Li Keqiang on Wednesday. Li listened to reports on the latest progress of this year’s campaign to cut excess capacities of steel, iron, coal-mining and coal-fueled power generation, as well as the findings of inspections over the drive in concrete and glass sectors. Li said reforms offer the way forward in cutting overcapacity, which is a vital part of the supply-side structural reform. “China takes the initiative to reduce production capacity based on its own national conditions. The efforts are to make the growth model and economic structure shift to new economic drivers,” he added. The government work […]

China Crude Oil Imports Ease From Record as Teapots Slow Buying

9 May 2017   China

Independent refiners bought 21% less oil month-on-month: ICIS April imports at 8.4 million b/d down 8.8% from March record China’s oil imports dropped from a record as purchases by the country’s independent refiners were seen slowing. Buying by China, which overtook the U.S. during the first quarter as the world’s biggest importer, averaged 8.4 million barrels a day in April, down 8.8 percent from a record the previous month, according to Bloomberg calculations based on data Monday from the General Administration of Customs. Net exports of oil products fell almost 49 percent from March to 1.01 million tons. Imports have accelerated this year as China’s state energy giants pump less crude after last year’s price crash forced them to cut spending on the country’s mature, high-cost fields. The import decline from a record in March was due to seasonal refining maintenance picking up and independent processors, known as teapots, […]

DOE: China alone accounted for 42% of global plug-in vehicle sales in 2016

About 756,000 plug-in electric vehicles (PEVs) were sold in the world in 2016, with 95% of those sales in China, Europe, the United States, Japan, and Canada, according to figures compiled by the US Department of Energy (DOE). China alone accounted for 42% of sales (316,800 units). China’s 2016 PEV sales grew by 53% from 2015’s 207,000 units—most of which were all-electric vehicles (EV) (244,400 units, or 77%). PHEV sales reached 72,400 units in 2016 in China. By comparison, US PHEV sales in 2016 were 72,900 units, slightly outpacing China; however, US battery-electric vehicles sales were only 86,700. All of the European countries combined had 11% PEV sales growth from 2015 to 2016 (209,300 units), with an EV share of 44% (91,300 units). The United States PEV market grew by 40% during the same time frame, with over half (54%) of sales being EV in 2016. Japan’s PEV market […]

China Crude Oil Imports Ease From Record as Teapots Slow Buying

8 May 2017   China

Independent refiners bought 21% less oil month-on-month: ICIS April imports at 8.4 million b/d down 8.8% from March record China’s oil imports dropped from a record as purchases by the country’s independent refiners were seen slowing. Buying by China, which overtook the U.S. during the first quarter as the world’s biggest importer, averaged 8.4 million barrels a day in April, down 8.8 percent from a record the previous month, according to Bloomberg calculations based on data Monday from the General Administration of Customs. Net exports of oil products fell almost 49 percent from March to 1.01 million tons. Imports have accelerated this year as China’s state energy giants pump less crude after last year’s price crash forced them to cut spending on the country’s mature, high-cost fields. The import decline from a record in March was due to seasonal refining maintenance picking up and independent processors, known as teapots, […]

Oil Traders Idled as China Refiners Fall Foul of Smog Fight

3 May 2017   China

Private refiners denied fuel export quotas so far this year Government seen reining in processors to combat pollution: EA A little over a year ago, China’s fast-growing private fuel makers were the newly minted stars of the global oil market, importing crude from the world’s biggest producers and seeking to sell their products abroad in a threat to rivals across Asia. Now, as the government cracks down on pollution and a glut of fuel at home, some traders who the refiners lured with an ambition to establish a global footprint are finding they have nothing to do. The processors, known as teapots, have been denied export licenses by the government, meaning they’ll have to remain home to compete with state-owned refining giants. That’s a relief for the wider Asian fuel market already overwhelmed by cheap supplies of Chinese gasoline and diesel, according to BMI Research. “We had specially hired […]

China’s Oil Giants Buoyed by Higher Prices as Output Stagnates

28 Apr 2017   China

Crude oil production falling as focus shifts to natural gas PetroChina swings to profit, Sinopec income more than doubles Oil’s recovery is helping ease the pain of shrinking output by China’s biggest energy producers. PetroChina Co. , the country’s largest producer, reported first quarter earnings swung to a profit thanks to the surge in prices, even as total output fell 6.3 percent from a year ago. China Petroleum & Chemical Corp. , the refining giant known as Sinopec, saw net income more than double while production dropped 2.4 percent. Along with Cnooc Ltd. , China’s biggest offshore explorer, the state-run firms are struggling to halt a drop in domestic crude output that’s pushed the country’s imports to a record, overtaking the U.S. as the world’s largest buyer. And as China’s big three raise combined spending for the first time in four years, the focus is beginning to shift to […]

Why Is China Funding Unsustainable Coal Projects In Pakistan?

28 Apr 2017   China, Coal, Pakistan

On April 16th, Chinese investments in Pakistan through the much-vaunted China-Pakistan Economic Corridor (CPEC) were revised upwards, from $46 billion to a whopping $62 billion . The project, part of China’s ambitious Belt and Road initiative to invest in trade routes from Asia to Europe, has huge implications for Pakistan’s development prospects. As part of CPEC, Beijing plans to build new industrial parks, railways, and roads to link its Xinjiang region with Pakistan’s port city of Gwadar. But instead of giving cause for celebration, the colossal Chinese investments heading to Pakistan have sparked massive protests from locals and environmentalists. Why? Because of Beijing’s senseless decision to use part of the funds to build outdated coal power plants. Since Pakistan boasts more than 175 billion tonnes of coal (equal to Saudi Arabia’s oil deposits in terms of heating value), harnessing its energy reserves is crucial to ensure the country’s economic […]

China to boost non-fossil fuel use to 20 percent by 2030: state planner

25 Apr 2017   China

China aims for non-fossil fuels to account for about 20 percent of total energy consumption by 2030, increasing to more than half of demand by 2050, its state planner said on Tuesday, as Beijing continues its years-long shift away from coal power. In a policy document, the National Development and Reform Commission said carbon dioxide (CO2) emissions will peak by 2030 and total energy demand will be capped at 6 billion tons of standard coal equivalent by 2030. (Reporting by Josephine Mason; Editing by Christian Schmollinger)

Converting Coal Would Help China’s Smog At Climate’s Expense

25 Apr 2017   China, Climate

China’s conversion of coal into natural gas could prevent tens of thousands of premature deaths each year. But there’s a catch: As the country shifts its use of vast coal reserves to send less smog-inducing chemicals into the air, the move threatens to undermine efforts to rein in greenhouse gas emissions, researchers said Tuesday. The environmental trade-off points to the difficult choices confronting leaders of the world’s second largest economy as they struggle to balance public health and financial growth with international climate change commitments. Between 20,000 and 41,000 premature deaths annually could be prevented by converting low-quality coal in the country’s western provinces into synthetic natural gas for residential use, according to the findings of researchers from the United States and China published in the Proceedings of the National Academy of Sciences. If the gas were used for industrial purposes, fewer deaths would be averted […]

Russia elbows Saudi Arabia aside as China’s top crude oil supplier in March

25 Apr 2017   China, Russia

Workers look at a drilling rig at a well pad of the Rosneft-owned Prirazlomnoye oil field outside the West Siberian city of Nefteyugansk, Russia, August 4, 2016. Russia reclaimed its position as China’s biggest crude oil supplier in March, customs data showed on Tuesday, displacing Saudi Arabia after two months in second place as Moscow fights to hang on to its slice of the Chinese market. Russian shipments grew nearly 1 percent to 1.104 million barrels per day (bpd) from the same month a year earlier, as China’s private refineries maintained high processing rates and restocked inventories after receiving fresh 2017 import quotas. China’s crude imports rose to a record in March, overtaking the United States and shattering expectations. Saudi shipments were 1.072 million barrels in March, up nearly 15 percent from a year ago, the General Administration of Customs said. For the first three months, Saudi arrivals stood […]

Exclusive: China gathers state-led consortium for Aramco IPO – sources

20 Apr 2017   China, Saudi Arabia

China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering of Saudi Aramco, people with knowledge of the discussions told Reuters. Saudi Aramco, a key exporter to China along with Russia’s Rosneft ( ROSN.MM ), is due to list next year, with a potential $100 billion equity sale that is expected to be the world’s largest to date. The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region, the same people said. Reuters reported earlier this month that Saudi Aramco’s board would meet in Shanghai in May, its first meeting in […]

China talks clean energy with Canada

20 Apr 2017   Canada, China

Chinese officials discussed clean energy during talks with the Canadian prime minister as both economies look to diversify their energy sectors. File photo by Stephen Shaver/UPI April 19 (UPI) — Clean energy and technologies related to the fight against climate change are some of the ways to foster trade with Canada, the Chinese premier said. Canadian Prime Minister Justin Trudeau spoke by phone late Tuesday with his Chinese counterpart, Li Keqiang. A readout of the meeting from the official Xinhua News Agency stated that both sides discussed bilateral opportunities in energy. The two leaders expressed willingness to expand bilateral trade and investments, the official newspaper reported. “The two countries should also strengthen cooperation on tackling climate change and cooperate in new areas such as clean energy to create new growth points in the relationship,” Li said. Many of the export metrics trended lower for Canada in 2015 and unemployment […]

Chinese economy growing while oil production shrinks

18 Apr 2017   China

China reports better-than-expected economic growth, but lower domestic crude oil production. File photo by Stephen Shaver/UPI. April 17 (UPI) — While posting better-than-expected growth for the first quarter, the Chinese statistics bureau said Monday that crude oil production was down from last year. China reported crude oil production down 6.8 percent compared with the first quarter of 2016. The National Bureau of Statistics reported Monday that national output was lower because industry costs were elevated, oil imports increased and refineries curbed activity. According to the official Xinhua News Agency, China produced 350 million barrels of oil during the first quarter. The official news agency stated that “accelerating exploration to ensure domestic oil supply, speeding up construction of pipeline networks and developing clean alternatives” are among the national priorities for the Chinese energy sector. According to pricing agency S&P Global Platts, China’s oil demand is up 5.3 percent year-over-year because […]

China first-quarter GDP grows 6.9 percent year-on-year, better than expectations

18 Apr 2017   China

Workers work at a construction site in front of Shanghai’s financial district of Pudong in Shanghai, China March 27, 2017. China’s economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a frenzied housing market that is showing signs of overheating. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the first quarter, the same pace as in the fourth quarter of 2016. The first-quarter growth pace was the fastest since the third quarter of 2015. The government is aiming for growth of around 6.5 percent in 2017, slightly lower than last year’s target of 6.5-7 percent and the actual 6.7 percent, which was the weakest pace in 26 years. While China’s data has been largely upbeat so far this year, many analysts widely expect the world’s second-largest economy to lose […]

Behind China’s Pickup in Growth: the Strong Hand of the State

18 Apr 2017   China

China on Monday posted its strongest quarterly growth in a year and a half, underlining how the fate of the world’s second-largest economy has tilted further into government hands. The reported growth pace of 6.9% in the first quarter was the result of better-than-expected investment, industrial production and building starts for March—all evidence that last year’s easy-money policies and infrastructure spending have…

China data: March crude throughput rises 6% on year to 11.23 mil b/d

18 Apr 2017   China

China’s crude refinery throughput in March rose 5.9% year on year to 47.5 million mt, or an average of 11.23 million b/d, preliminary data released Monday by the National Bureau of Statistics showed. This was the highest year-on-year growth in refinery runs since September 2015. The last highest year-on-year growth in refinery runs was 6.5% in August 2015. On a daily basis, however, the refinery throughput was slightly down from the average of 11.28 million b/d over January-February. The average for the first two months of the year was combined as NBS does not provide separate data for January and February. The drop in refinery runs was somehow in line with the trend showed by a survey done by S&P Global Platts in March — some of the largest state-owned refiners in China saw average utilization rate move down to 79% of nameplate capacity, compared with 85% in February […]

China’s robust commodity imports as good as it gets, for now: Russell

18 Apr 2017   China

It’s probably best to look at China’s extremely strong commodity imports in March as a history lesson, rather than a pointer to future trends. Record high imports of crude oil, the second-most for iron ore and a 34 percent surge in the first quarter for coal from the same period in 2016 all speak of robust demand in the world’s importer of commodities. However, the chances are that this is as good as it gets, at least for a while. This isn’t to suggest that commodity imports are due for a sharp pullback in coming months, rather the likelihood is that they will moderate back toward more sustainable growth rates. Crude oil imports surged 22.6 percent from February to 38.95 million tonnes, equivalent to about 9.17 million barrels per day (bpd). This was […]

China March steel output climbs to highest on record

17 Apr 2017   China

China’s steel output rose 1.8 percent in March to a monthly record of 72 million tonnes, stoking worries of a glut that continues to grow even as Beijing tries to rein in excess capacity in the bloated sector and demand remains flat. March’s monthly total easily beat the previous record of 70.65 million tons hit in March 2016, data from the National Bureau of Statistics showed on Monday. In the first quarter, production totaled 201.1 million tons, up 4.6 percent from the same period a year earlier, the data also showed. The growing production as Chinese mills bid to profit from prices that soared in 2016 and into this year are undermining the government’s years-long push to cut capacity to make the steel industry more efficient and […]

Chinese economy grows 6.9% in first quarter

17 Apr 2017   China

China’s economy has started 2017 with its strongest quarterly performance in 18 months, on the back of a surge in industrial activity, property investment and credit growth. The country’s gross domestic product grew at an annual rate of 6.9 per cent in the first quarter of 2017, slightly higher than analysts’ consensus expectations. Growth was strongest towards the end of the three-month period, suggesting that momentum was building into the second quarter of 2017. The strength of China’s industrial sector was augmented by growth in Chinese credit — including shadow lending outside the formal banking sector — and a bullish turn in commodities that began last year. The seeming stability of China’s official growth figures can mask big swings in the world’s largest economy. Real GDP growth for the first three months of 2017 was the strongest since the third quarter of 2015, while nominal growth was the highest since March 2012. This quarter’s positive figures come in a year of expected consolidation of power by President Xi Jinping, whose second term as head of the ruling Communist party will begin later this year following the country’s 19th national congress.

China data: March raw coal output posts first rise since Feb 2015

17 Apr 2017   China

China’s raw coal production in March increased 1.9% year on year to 300 million mt, the first rise since February 2015, the National Bureau of Statistics said Monday. First-quarter raw coal production dropped 0.3% year on year to 810 million mt. Production growth in 25 provinces, such as Inner Mongolia, Guizhou, Yunnan, Shanxi and Ningxia, was more than 5% year on year while 20 provinces posted falls in production, especially Jiangxi, Hubei and Chonqin, with output falling more than 30% year on year. The NBS said production at small- to medium-sized miners in Jiangxi, Hubei and Chonqin was hit by the central government’s move to eliminate certain capacities. Chinese power generation in March increased 7.2% on the year to 516.89 TWh. Total Q1 generation was up 6.7% on year at 1,458.72 TWh. Thermal power generation in March rose 7.7% year on year, while Q1 thermal power generation was up […]

China Ready To Cut Oil Supplies To North Korea

14 Apr 2017   China, North Korea

Beijing’s patience with North Korea is wearing thin as Pyongyang continues to conduct nuclear missile tests. According to a state Chinese media outlet, Huanqui, China is considering a suspension of its crude oil exports to its neighbor should North Korea conduct a sixth nuclear test. North Korea depends on China for 90 percent of its crude oil supply, and stopping these will wreak havoc on the dictatorship, which China has been trying to avoid, since a regime collapse is likely to result in a massive influx of refugees. It has also opposed President Trump’s urging to penalize North Korea for the nuclear tests so far, but now it seems the mood is changing – having another nuclear neighbor is hardly China’s idea of a stable regional environment. Asia’s biggest economy also has other ways to make Kim Jong Un give up nuclear tests, such as stopping or reducing the […]

China’s Electric Vehicle Market Is Unbeatable

14 Apr 2017   China, Electric Cars

Ford Motor Co. just announced an ambitious electrification strategy for China. The global Mondeo sedan will see the Mondeo Energy plug-in hybrid launched there early next year, followed by an all-electric small SUV a few years later that will go about 280 miles on one charge. The Detroit automaker sees 70 percent of all Ford nameplates coming with an electrified option to China by 2025; that will include all of its products manufactured jointly through Ford’s state-mandated joint venture partner, Changan Ford JV. Ford will be adding manufacturing facilities to meet the targets. Ford is taking a more tepid approach to the U.S. market with a small number of electric models for sale. Ford CEO Mark Fields has also asked President Donald Trump to take a more conservative approach to federal fuel economy and emissions guidelines than enacted by the Obama administration shortly before leaving office. Tesla reported making […]

China Takes Crude Crown as Output Lags Behind Rising Demand

13 Apr 2017   China
China Takes Crude Crown as Output Lags Behind Rising Demand

China’s record oil imports in March helped it top the U.S. as the world’s biggest buyer during the first quarter as stockpiling and aggressive buying by refiners coincided with slumping domestic production. on barrels a day, up 11 percent from February, according to Bloomberg calculations based on data Thursday from the General Administration of Customs. Shipments during the first quarter rose 15 percent to almost 105 million tons, or about 8.5 million barrels a day. The U.S. imported almost 8.15 million during the first three months, Bloomberg calculations using weekly data show.

While the jump in March was seen as temporary, growing use of transportation fuels, new refineries and an expansion of emergency reserves have put China on a steady rise toward challenging the U.S. as the world’s biggest importer. Buying last month was likely boosted by stockpiling and purchases from the country’s independent oil refiners, which raised their processing of imported crude to a record last month, according to analysts from ICIS China, Citigroup Inc. and Energy Aspects Ltd.  “We could see a sharp drop in April following this surge,” Li Li, a research director with ICIS China, said by phone.

March shipments will result in a “fairly high” stockpile buildup and likely flowed into tanks leased for the country’s strategic petroleum reserves as the start of the newest government-owned storage is delayed, Citigroup analysts including Tracy Liao said in a note Thursday.  “Teapot buying was strong in March, although the strength does surprise us,” said Virendra Chauhan, an analyst at London-based Energy Aspects, using the industry term for independent refiners. “We don’t think 9 million barrels a day is a level that is likely to be maintained and helps explains why buying has eased up and regional markets have softened.”

China Opens Delayed Myanmar Oil Pipeline to Get Mideast Crude Faster

12 Apr 2017   China, Myanmar

Pipeline operations start as crude unloaded at Made Island Tanker United Dynamic arrived from Turkey on April 9: data A crude pipeline to southwestern China through its neighbor Myanmar began operations after years of delays, allowing the world’s second-biggest oil user to receive supplies faster from the Middle East and Africa. A Suezmax-sized tanker, which can hold 140,000 metric tons (about 1 million barrels) of crude, began offloading oil for the pipeline on Monday at Myanmar’s Made Island, according to China’s official Xinhua News Agency. Operations on the line, which was completed in 2014 and originally scheduled to start the same year, are beginning after the government of Myanmar agreed to lower transit fees, Wang Dongjin, president of PetroChina Co., said last month. The link, which allows China to import crude from the Middle East and Africa without having to ship through the Straits of Malacca and into the […]

China’s 2017 thermal imports to surge by 30 million mt over 2016: Noble

11 Apr 2017   China

China’s thermal total coal import in 2017 is expected to surge by about 30 million mt over that in 2016, on the back increasing power generation, according to Noble Group. “The fundamentals in the coal market changed last year,” Rodrigo Echeverri, head of Noble Group’s energy coal analysis, said at the Coaltrans Conference in Shanghai on Monday. He said that there has been a demand shock in the thermal coal market without a supply response, which has helped support the prices. China’s thermal coal import during the first quarter of 2017 was about 12 million mt more than Q1 2016’s imports, Echeverri said. He pointed out that China’s thermal power generation in Q1 2017 increased 7% over Q1 2016’s, while output of coal increased by only about 4%. “Import of coal is very important for power producers and cement manufacturers in South China and they don’t have a ceiling […]

Ford to Make Electric Cars in China Amid Green Drive

8 Apr 2017   China

Ford Motor Co. said Thursday that it would start building electric cars in China to tap into a state-sponsored boom in green-energy vehicles. In doing so, the Detroit-based company signaled that it had swallowed industry concerns about bringing proprietary electric-car technology to China, despite misgivings among foreign auto makers about intellectual-property protection in the world’s largest auto market. “It’s…

Rising Waters Threaten China’s Rising Cities

7 Apr 2017   China

The rains brought torrents, pouring into basements and malls, the water swiftly rising a foot and a half. The city of Dongguan, a manufacturing center here in the world’s most dynamic industrial region, was hit especially hard by the downpour in May 2014. More than 100 factories and shops were inundated. Water climbed knee-high in 20 minutes, wiping out inventory for dozens of businesses. Next door in Guangzhou, an ancient, mammoth port city of 13 million, helicopters and a fleet of 80 boats had to be sent to rescue trapped residents. Tens of thousands lost their homes, and 53 square miles of nearby farmland were ruined. The cost of repairs topped $100 million. Chen Rongbo, who lived in the city, saw the flood coming. He tried to scramble to safety on the second floor of his house, carrying his 6-year-old granddaughter. He slipped. The flood swept […]

China Just Became The No.1 Buyer Of U.S. Crude

6 Apr 2017   China

While OPEC is implementing production cuts, U.S. crude oil exports are steadily growing and winning customers even in China. In February, China was the biggest buyer of U.S. light crude oil, overtaking Canada as the top destination of U.S. crude exports. According to data by the U.S. Census Bureau crunched by Bloomberg, U.S. crude sales in China jumped almost fourfold in February compared to January, to 8.08 million barrels, versus the 6.84 million barrels of oil that Canada imported from the U.S., which was a 20-percent monthly drop. U.S. crude oil exports reached a record high of 31.2 million barrels in February, the data showed. U.S. crude oil exports to China started surging in November last year, according to data by the EIA available through January this year. In January, China bought 2.003 million barrels of U.S. crude. By comparison, U.S. oil exports to Canada stood at 8.538 million […]

China’s oil demand resilient in early 2017 as industrial sector shines

6 Apr 2017   China

China’s apparent oil demand rose 5.3% year on year in the first two months of 2017 to 11.65 million b/d on the back of robust economic growth, holiday transportation demand and efforts to build stocks ahead of the refinery maintenance season that started in March. Oil products across the barrel witnessed year-on-year demand growth over January-February, with LPG witnessing strongest growth of 24.8%, while gasoil demand rose 0.4%, rebounding from year-on-year declines since December 2015. China’s industrial production grew 6.3% on year over January-February, beating expectations of 6.2% and accelerating from 6% in December. Fixed asset investment grew 8.9% in the two-month period, accelerating from 8.1% in December, according to data from the National Bureau of Statistics. These factors helped to lift gasoil consumption in the transportation and construction sectors. The week-long Chinese New Year holidays also pushed up demand for transportation fuels gasoline and jet fuel. A significant […]

China Surpasses Canada as Top Buyer of U.S. Crude

5 Apr 2017   China

China became the biggest buyer of U.S. crude oil in February, surpassing Canada, at a time when OPEC is cutting back output. China imported 8.08 million barrels of U.S. light crude, nearly quadrupling its January purchases, according to data released by the U.S. Census Bureau Tuesday. That helped boost U.S. exports to a record 31.2 million barrels during the month. Canada, the U.S.’s largest trade partner, imported 6.84 million, down 20 percent from a month earlier. The surge in U.S. shipments to Asia, a market long dominated by Saudi Arabia and other Middle East producers, comes as the Organization of Petroleum Exporting Countries trims output in an effort to end a glut that battered the economies of global energy exporters. Saudi Arabia reduced its pricing for some of its April crude sales to Asia as supplies from the U.S. became more competitive. “The U.S. is a larger exporter of […]

Beijing issues air pollution orange alert

4 Apr 2017   China, Climate

Beijing upgraded its alert for air pollution to orange Monday afternoon, the second highest warning. The smog, affecting Beijing and adjacent Tianjin and Hebei, is forecast to last until Friday. Beijing had issued the yellow alert early Monday morning, but the density of hazardous fine particle matter PM2.5 continued to grow. “The wind is not strong enough and the air quality is likely to get worse,” said the Beijing Municipal Environmental Protection Bureau. The Beijing Municipal Environmental Monitoring Center forecasts that PM2.5 readings will be between 200 and 220 micrograms per cubic meter Tuesday. Under the orange alert, outdoor paint and construction is suspended; trucks carrying garbage, sand and soil are taken off roads; and outdoor activities in kindergartens, middle schools and primary schools are stopped. Beijing has a four-tier color alert system for pollution, with red being the highest, followed by orange, yellow […]

China steps up pollution check as smog blankets areas near Beijing

3 Apr 2017   China

China’s environmental inspectors intensified pollution checks around Beijing as a new round of smog hit the region. The new round of air pollution will continue in the Beijing-Tianjin-Hebei region between April 3 and 7, with the cities of Tianjin, Tangshan, Langfang, Puyang and Anyang issuing orange alerts, the second highest in the country’s four-tier warning system. To ensure policies on fighting air pollution, the Ministry of Environmental Protection said on its website that seven teams have been sent to Beijing, Tianjin as well as the cities of Shijiazhuang, Tangshan, Baoding, Xingtai and Anyang in neighboring Hebei and Henan provinces. Inspectors found several companies in Tianjin and Baoding had failed to meet requirements for cutting pollutants, while some vehicles in Beijing failing to meet emission requirements. The ministry urged local authorities to address the problem. China has been under growing pressure to address air pollution […]

China wades into oil basins off the West African coast

1 Apr 2017   China, Senegal

Prospects for expanding the footprint in emerging oil basins off the Senegalese and Gambian coasts has increased through a Chinese partnership, FAR Ltd. said. FAR Ltd., an Australian company with a heavy focus on oil basins off the coast of Africa, said it entered into a partnership with the British subsidiary of China National Offshore Oil Corp. that defines areas of mutual interest off the coast of Gambia and Senegal. The deal gives both companies the ability to partner up on evaluating, bidding, negotiating and managing any joint ventures or buy-in opportunities for oil and gas in the broader Mauritania-Senegal-Guinea-Bissau deepwater basin. FAR Managing Director Cath Norman said in a statement that her company has […]

Glencore Sells Oil Storage Assets to China’s HNA Group

1 Apr 2017   China

Glencore PLC, one of the world’s biggest oil traders, has agreed to sell a majority stake in its petroleum products storage and logistics business for $775 million in cash to Chinese conglomerate HNA Group. The move comes as China’s demand for oil storage ramps up amid rising consumption by its expanding urban population. China is the world’s second largest oil consumer, behind the U.S. HNA Group will purchase a 51% stake in…